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BenefitsLink > Q&A Columns >

Who's the Employer?

Answers are provided by S. Derrin Watson, JD, APM

De Minimis Shared Employee

(Posted December 22, 2000)

Question 70: Five dentists share a dental suite. Three work 5 days a week; one works 4 days a week; the other dentist, John, only works Fridays. There's one employee shared by the dentists, who is a receptionist. She works all 5 working days, full-time. John pays only 5% of the receptionist's salary. Would he have to treat her as a full-time employee, even though she is only working about 100 hours a year for his practice? Is there a de minimis amount, where such an employee is not considered "shared" anymore?

Answer: Your question contains a false premise, that the receptionist is only working 100 hours a year for John. Actually, she is there answering his phone 5 days a week. All day Friday she is there, soothing his patients and collecting their checks. Under common law principles and the various revenue rulings issued by the IRS, she is his full-time employee.

He pays her only 5% of her salary, it is true, but she is credited with 2,000 hours of service in connection with that 5% of her compensation.

The old revenue rulings do not contain any de minimis exception.

These issues are discussed in more detail in Chapter 5 of my book, Who's the Employer?.

Important notice:

Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.

The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.